Danone Forecasts Steady Sales Growth, Limited Hit From Infant-Formula Recalls — Update

By Aimee Look

Danone projected steady sales growth for the year ahead, with a muted impact from infant-formula recalls, as the French food maker sought to reassure investors that the hit wouldn't linger for long.

The company behind Aptamil baby milk has been one of the companies affected by a tainted ingredient in its infant formula. Over the past few months, food companies including Danone and Nestle issued warnings or pulled infant nutrition labels off the shelf in more than 60 countries. Danone's stock has fallen this year amid the recalls.

Danone, also home to brands like Activia yogurt and Evian water, on Friday estimated the recalls would shave between 0.5% and 1% off the group's net sales in the first quarter. It forecast like-for-like sales to increase by 3% to 5% for the year as a whole, in line with its midterm target and with its guidance in recent years.

The company said recall processes were under way in coordination with authorities, and executives said in a call with analysts that it was too early to quantify the impact on consumer sentiment in Europe. The company said it would provide a final assessment of the recalls' impact once they are finalized, with the current estimate pointing to an immaterial impact.

Danone's outlook should "reassure investors looking for stability," Barclays analyst Warren Ackerman said in a note to clients.

The update from Danone came after Swiss peer Nestle on Thursday said it anticipated infant-formula recalls to lead to a direct hit to sales growth of 0.9% in the first quarter and 0.2% for the year as a whole, but cautioned that uncertainty about indirect impacts could mean full-year organic sales growth landed at the lower end of its 3% to 4% range.

Danone said momentum, particularly in its high protein business in North America, helped its top line in the fourth quarter, and reported a 4.7% rise in like-for-like sales. Analysts had expected the metric to rise 4.4% for the quarter, according to company-compiled estimates.

For the fourth quarter, volumes grew 2.5%, while prices increased 2.1%, the company said.

On a reported basis, quarterly sales fell to 6.68 billion euros ($7.86 billion) compared with 6.72 billion euros in the same period a year prior. Analysts had expected 6.67 billion euros in sales for the quarter.

Danone made a net profit for the full year of 1.825 billion euros, down from 2.02 billion a year before. The company said it booked a nonrecurring loss of 725 million euros, which included one-off costs related to transformation projects in Europe and Indonesia.

Despite questions on the hit to its infant-formula business, Danone otherwise had a strong showing, analysts said.

Shares traded 0.6% lower in European morning trading.

Write to Aimee Look at aimee.look@wsj.com

(END) Dow Jones Newswires

February 20, 2026 05:09 ET (10:09 GMT)